Consumer Lifestyle Business Division

Transcription

1 Consumer Lifestyle Business Division Summary of Performance under Shine 211 Under Shine 211, the Consumer Lifestyle In our overseas operations, we have also shifted staff outside of Japan. We reinforced our overseas businesses by sending about 2 additional people to Business Division thoroughly analyzed the efficiency of assets and optimized inventories to solidify its footholds. Simultaneously, we made progress in transforming our earnings structure to create higher added value in line with our basic policy of Grow, process, make and then sell. We aggressively executed a growth strategy based on overseas posts, mainly in emerging countries, including strategic staff responsible for project development and other tasks. Moreover, we assembled a cross-departmental task force targeting Africa, Indochina, Brazil and India. By uncovering new business opportunities, the task force established footholds for building quality assets in the future. three pillars: shifting from Japanese to overseas markets, shifting from trading to a Strategies of Mediumterm Management Plan business investment model, and securing upstream resources in 214 Change for the agriculture, forest products Challenge and marine products sectors. A strong revenue base is taking shape as a result. New business investments included a compound feed production business in Vietnam and Soybeans produced by Sojitz in Argentina In Medium-term Management Plan 214, we will maintain the same three directions we pursued in Shine 211: shifting from Japanese to overseas markets, shifting from trading to a business development model, and Cambodia; fish farming businesses (a bluefin tuna farm business in Takashima, Nagasaki Prefecture, and a shrimp farm in Indonesia); grain production in Argentina; a woodchip manufacturing business in Mozambique; and industrial park development businesses in Asia (Vietnam, India and Indonesia). Each of these businesses is run in cooperation with excellent business partners, with the aim of creating a new business model to drive the transformation of our earnings structure. securing upstream resources in the agriculture, forest products and marine products sectors. We will launch a new business model for business focus areas aimed at enhancing our ability to generate earnings over the medium-to-long term, while focusing on solidifying our business foundation by ensuring that existing key projects and projects in which we have invested are executed on schedule. At the same time, we will reduce assets and enhance liquidity by promoting withdrawal or Gross Trading Profit Ordinary Income (Loss) (Billions of yen) * (Billions of yen) * (4.1) (5) (Years ended/ending March 31) (Target) (Years ended/ending March 31) (Target) * Results for the 12 months ended March 31, 212, excluding the results of significant overseas consolidated subsidiaries for the period January March Sojitz Corporation Annual Report 212

2 The Objectives of Medium-term Management Plan 214 Business Strategies Management Foundation The Sojitz Group s Corporate Social Responsibility Performance Data Organization Financial Section Main Businesses Distribution of Main Subsidiaries Foods Resources Unit Agriculture & Forest Resources Unit Consumer Service & Development Unit divestitures in selected business areas through enhanced selection-and-focus initiatives. In the Foods Resources Unit, we have a 2% stake in the port owned by Interflour Vietnam Ltd., one of the largest of its kind in the ASEAN region. We will use the port facilities as a base to expand our trading of grain in general and to strengthen operation of the first Japanese-owned compound feed production company in Vietnam, which we recently established. Commercial feed production in Vietnam is growing by about 1% annually as demand for meat increases. With the population projected to continue increasing, we believe this market has excellent growth prospects. In the grain origination, storage and export terminal business, which is a business focus area, we will invest in country elevators and export terminals in grain-producing countries, enabling while initiating investments in upstream businesses. By securing upstream interests in high-quality, upstream compound fertilizer interests such as phosphorus and potash, we will reinforce the foundation of the fertilizer business, including existing businesses, and grow earnings. As for the agricultural business in Argentina, now in its third year, we will strengthen production and sales of grains, primarily soybeans, on 11, hectares of farmland. We will also establish a business model that includes expansion of farmland and undertake exports to Asian countries. In the consumer service area, we acquired the additional shares of one of the largest food wholesale companies in Vietnam to make it our subsidiary in March 212. Our objective is to build a solid business base on the retail market in Vietnam, which is projected to grow by more us to handle the entire supply chain from origination to sale. This will Flour mill, silos and port facilities of Interflour Vietnam Ltd. than 2% annually. In the overseas construction development business, support our efforts to secure grain resources. In the marine products business, we will build a value chain centered on the domestic bluefin tuna farming business. We are also undertaking shrimp farming business in Indonesia. In the Agriculture & Forest Resources Unit, fertilizer is a business focus area. We will continue to concentrate on the manufacture and sale of high-quality compound delivery of lots is set to begin in the second half of 212 at the industrial park we developed near Ho Chi Minh City. The park is attracting attention from Japanese manufacturers and other companies planning to set up operations in Vietnam. We plan to develop new industrial parks in emerging countries such as India, where construction is scheduled to begin in 213. fertilizers, a strong source of earnings for Sojitz in Asia, Total Assets and ROA Medium-term Management Plan 214 Gross Profit Targets (Billions of yen) (%) (.8) (1) (1.) (As of March 31) Total assets (left scale) ROA (right scale) (Billions of yen) (Target) (Target) (Years ending March 31) Foods Resources Agriculture & Forest Resources Consumer Service & Development Sojitz Corporation Annual Report

3 Consumer Lifestyle Business Division: Review of Operations Foods Resources Unit Agriculture & Forest Resources Unit Businesses Grains and feed materials: Trading, domestic trading and sale and overseas production of wheat, corn, soybeans, rice, oil and fat, flour, pasture and compound feed; port operation, etc. Foods resources: Trading, overseas processing, and domestic trading and sale of sugar, coffee, seafood (tuna, shrimp, processed seafood, etc.), and general food products; fish farming, etc. Businesses Agribusiness: Production, sale and import/export of advanced chemical fertilizers; agriculture Forest products: Import, offshore trading and sales in Japan of timber, lumber, plywood, building materials, woodchips, pulp, etc.; overseas afforestation and woodchip production businesses 38 Grains and Feed Materials Business Sojitz is investing in businesses to build a supply chain in the grains and feed materials business in the Asian market, which is benefiting from rapid Interflour Vietnam Ltd. flour mill economic growth. In Vietnam, we entered the flour milling business with an investment in Interflour Vietnam Ltd. (IFV), a leading Vietnamese flour milling company. We are also using IFV s specialized grain port, the ASEAN region s largest, as a distribution base to expand into the compound feed production business in partnership with Kyodo Shiryo Co., Ltd., a leading Japanese feed producer with original technology, in Vietnam, and with New Hope Liuhe Co., Ltd., China s largest feed company, in Cambodia. We are also engaged in more consumer-oriented businesses, including bread production in North America and Asia. Foods Resources Business The Sojitz Group s foods resources business is divided into three major categories: sugar and coffee, marine products, and food distribution. For sugar and coffee, we plan to focus on the Bluefin tuna farming operation at Sojitz Tuna Farm Takashima development of project business as well as trading. In marine products, we handle domestic imports and sales of tuna and shrimp as well as overseas processing. We also operate fish farming businesses, including bluefin tuna in Takashima, Nagasaki Prefecture, Japan and shrimp in Indonesia, to help ensure the stability of food supply by addressing the rapid surge in global demand and tighter fishing restrictions. In food distribution, we handle overseas processing, imports and sales of general food products in Japan, mainly through subsidiary Sojitz Foods Corporation, and support the overseas operations of Japanese food companies. We also conduct the snack business through affiliate Yamazaki-Nabisco Co., Ltd. Sojitz Corporation Annual Report 212 Agribusiness In its agribusiness operations, Sojitz is developing business with a focus on upstream areas of the food supply chain. Fertilizers are essential to agriculture, Soybean farm in Argentina and our high-quality compound fertilizer production capacity and sales network, with manufacturing and sales companies in Thailand, Vietnam and the Philippines, are among the largest in Southeast Asia. We are also eyeing the acquisition of upstream interests in resources such as nitrogen, phosphorus and potassium. In Argentina, we have leased more than 1, hectares of farmland for production of soybeans and other crops, strengthening our ability to steadily source produce from the most upstream areas of the supply chain. These business activities will enable Sojitz to offer solutions to potential food shortages in the future. Forest Products Business In the forest products business, Sojitz primarily handles products such as logs, plywood and paper raw materials. We are building a stable supply network and strengthening our response to the diversification of markets and applications. We are also raising the percentage of environmentally friendly products that come from plantations and certified forests. In log trading, we are taking advantage of our strong relationships with leading suppliers to expand imports into Japan and sales to customers in China, India and other emerging countries. Sales of plywood and building materials are handled by Sojitz Building Materials Corporation, a subsidiary with the top market share for plywood in Japan. In the paper raw materials business, we are strengthening our woodchip manufacturing business in Vietnam, and applying the knowledge gained from these operations to develop business in Africa through a woodchip manufacturing company we established in Mozambique. We also plan to increase the amount of pulp we handle, mainly for sale to emerging markets. A plantation site in South Africa for supplying woodchip materials

4 The Objectives of Medium-term Management Plan 214 Business Strategies Management Foundation The Sojitz Group s Corporate Social Responsibility Performance Data Organization Financial Section Consumer Service & Development Unit Businesses Consumer goods distribution: Imports of cigarettes; brand sundries including shoes and bags; overseas wholesale, distribution and retail; retail at airports with JALUX Textiles: OEM and apparel brand business Overseas construction development: Development and operation of overseas industrial parks Consumer Goods Distribution Business In emerging countries, where economic and social conditions are changing with rapid economic growth, the needs of consumers are also diversified. Sojitz is advancing into the wholesale and distribution businesses overseas with a focus on those countries, based on its experience in the consumer goods import business in Japan, the world s third-largest market. As one such initiative, Sojitz and major Japanese food wholesaler KOKUBU & Co., Ltd. jointly invested in one of Vietnam s largest food wholesalers, Huong Thuy Manufacture Service Trading Corporation (HT), which became a consolidated subsidiary of Sojitz. To meet the projected expansion of food demand in Vietnam and contribute to the modernization of distribution, HT is developing a distribution network, building an information system for distribution, and supporting Japanese manufacturers expecting to enter the market in Vietnam. Our goal is to become the leading general consumer goods wholesaler in Vietnam focused mainly on food products. We will use this business foundation in Japan to expand our initiatives in the growing market of China, with initiatives such as enhancing the functions of local subsidiaries. Overseas Construction Development Business Japanese companies are eager to conduct manufacturing overseas, and the demand for Japaneseaffiliated industrial parks overseas is growing. Sojitz is leveraging its cooperative relationships with outstanding business partners, its many years of experience and expertise and its global network of representatives to develop industrial parks in Vietnam, Indonesia and India. We handle an array of tasks, from providing basic infrastructure including water and sewage, electric power and communications to attracting tenant businesses and operating and managing industrial parks. Sojitz also provides comprehensive assistance to support companies in setting up transplants, from establishing local subsidiaries to obtaining approvals and hiring workers. In addition, the Sojitz Group has created a competitive business model with services that include distribution support that gives industrial parks logistics functions, plant facility construction, sale of manufacturing equipment, relocation and delivery of raw materials. Food warehouse (left) and delivery truck (right) of Huong Thuy Manufacture Service Trading Corporation Textiles Business In addition to manufacturing private-label apparel for major specialty retailers, Sojitz has established a solid business foundation through key subsidiaries in the rapidly changing apparel industry in Japan. Sojitz Infinity Inc. conducts the McGREGOR brand apparel business, Sojitz Fashion Co., Ltd. sells VANCET fabric stock, and Daiichibo Co., Ltd. operates a practical clothing business based on its distinctive spun yarns. McGREGOR CLASSIC brand Long Binh Techno Park in Vietnam Sojitz Corporation Annual Report

5 Ten Declarations from Hideaki Kato, 6President, Consumer Lifestyle Business Division We will be a pivotal component by creating a strong organization effectively while evolving rapidly. Involved in a wide range of areas that are intimately connected with food, clothing and shelter, the necessities of life, the Consumer Lifestyle Business Division represents the origin of the general trading company. In addition to trading individual products, we are distinguished by the new business models we form that incorporate value chains from upstream to downstream. A core division asset is the large number of historical relationships inherited from our predecessors. We are building a powerful earnings structure based on this asset so that the division can consistently generate stable earnings. The progress we made during Shine 211 laid the cornerstone for transforming our earnings structure. During Medium-term Management Plan 214, we will aggressively promote asset replacement through rigorous selection and focus to distinguish businesses with efficient assets and strong growth potential that we will cultivate. At the same time, we will steadily execute investment and loan projects initiated during Shine 211 to maintain growth. While operating in a wide range of areas associated with food, clothing and shelter, we will concentrate on investing in businesses and accelerating overseas operations to further expand business opportunities. We are seeing solid results, including more inquiries and stronger relationships with our business partners, especially in China and Asia. We will therefore further enhance our advantages in these regions and set our sights on developing business in South America, Africa and elsewhere. The keys to successfully carrying out Medium-term 4 Sojitz Corporation Annual Report 212

6 of Sojitz s future that executes Management Plan 214 will be a solid commitment to achieving targets and effective execution during the year ending March 31, 213, the first year on the plan. We will transform our earnings structure and business venues with a sense of urgency. My mission is to build a strong organization that will resolutely execute the plans we have formulated. I will do so by bringing together the intelligence of individuals in an open environment. While building this highly transparent organization, we will monitor partners and trends in our markets with a front-line perspective to create a highly independent organization that anticipates changes in the business environment. We will continue to take on the challenge of evolving as a pivotal component of Sojitz s future. Managing Executive Officer President, Consumer Lifestyle Business Division Hideaki Kato Sojitz Corporation Annual Report